Property Management
The management fee for a residential property is most commonly structured as:
AA flat monthly fee regardless of occupancy
BA percentage of the monthly gross rents collected✓ Correct
CA fee per tenant placed, with no ongoing fee
DAn annual fee paid in advance
Explanation
Residential property management fees are most commonly structured as a percentage of monthly gross rents collected, typically ranging from 8%-12%. This aligns the manager's incentive with keeping the property occupied and rents collected.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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